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<\/a><\/p>\nUK inheritance tax (IHT) receipts surged to \u00a31.48 billion in recent months\u2014a 7% (\u00a398m) increase from last year\u2014as frozen tax thresholds drag more families into paying the so-called “most-hated tax.”<\/p>\n
Why Is IHT Rising?
\n\ud83d\udd39 Frozen thresholds until 2030 \u2013 The nil-rate band (\u00a3325,000) and residence nil-rate band (\u00a3500,000) remain unchanged despite rising property and asset values.
\n\ud83d\udd39 Pensions to be included from 2027 \u2013 Chancellor Rachel Reeves announced pensions will be subject to IHT, widening the tax net.
\n\ud83d\udd39 Soaring asset prices \u2013 Homes, investments, and savings push more estates over IHT limits.<\/p>\n
Key IHT Facts
\n\u2714 40% tax rate on estates over \u00a3325,000 (or \u00a3500,000 if leaving a home to children\/grandchildren).
\n\u2714 Married couples can combine allowances, protecting up to \u00a31 million.
\n\u2714 Only 4% currently pay IHT, but the Institute for Fiscal Studies (IFS) predicts this will rise to 7% by 2033.<\/p>\n
Who\u2019s Most Affected?
\nMiddle-class families \u2013 Rising home prices push more into IHT territory.<\/p>\n
Business owners \u2013 Fear having to sell family firms to pay tax bills.<\/p>\n
Pension holders \u2013 From 2027, pensions will be included in IHT calculations.<\/p>\n
Expert Warnings
\nJonathan Halberda (Wesleyan Financial Services):
\n“This is no longer just a tax for the wealthy. More families are being caught simply because their homes and assets have grown in value.”<\/p>\n
Laura Hayward (S&W):
\n“Frozen thresholds mean even modest inflation drags more people into IHT. The government may hike taxes further in the next Budget.”<\/p>\n
How Can You Reduce IHT?
\n\u2705 Lifetime gifting \u2013 Use “normal expenditure out of surplus income” rules.
\n\u2705 Seven-year rule \u2013 Gifts given 7+ years before death escape IHT.
\n\u2705 Trusts & exemptions \u2013 Seek financial advice to protect wealth.<\/p>\n
Future Risks
\n\u26a0 Government may extend the 7-year gifting rule to 10 years \u2013 making it harder to pass on wealth tax-free.
\n\u26a0 Further IHT reforms expected \u2013 Speculation grows ahead of the autumn Budget.<\/p>\n
Broader Tax Squeeze
\n\ud83d\udccc Income tax & NI receipts up \u00a36.1bn \u2013 Frozen thresholds mean pay rises push workers into higher tax brackets.
\n\ud83d\udccc Employer NI hikes \u2013 Rate increased from 13.8% to 15%, costing businesses \u00a38.6bn more annually.<\/p>\n
The Bottom Line
\nWith IHT at record highs and pensions soon included, families must plan ahead to avoid hefty tax bills. Financial advice and early gifting strategies are now crucial.<\/p>\n","protected":false},"excerpt":{"rendered":"
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